MANILA, Philippines (Xinhua) – Foreign portfolio investments known as “hot money” to the Philippines declined 8.5 percent on year to $1.3 billion in the first quarter of 2013, the central bank reported today.
The central bank said lower net equity capital investments reduced inflow of portfolio investments in the country. Gross equity capital placements rose 49.4 percent on year to $1.5 billion in the first quarter, mostly due to investments that came in from Mexico, Japan, Malaysia and the U.S. But these placements were offset by withdrawal of $799 million during the same period.
Reinvestment of earnings likewise declined, decreasing 26.3 percent on year to $196 million in the first quarter.
Net placements by overseas companies in debt instruments issued by local affiliates totaled $378 million, up 71 percent on year as parent companies abroad continued to lend funds to their local subsidiaries and affiliates to sustain existing operations or expand their businesses in the country.
In March alone, FDI posted net outflow of $78 million.
